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As a local real estate broker, I’m often asked, “How’s the real estate market doing these days, and what can we expect for 2025?” While it’s tempting to offer a rosy outlook, realism prevails. The housing market remains constrained and faces significant challenges.

Mortgage rates are holding steady around 7%, a stark contrast to the 3% to 4% rates many homeowners secured during the pandemic-era lows. This disparity discourages potential sellers, resulting in one of the tightest housing inventories in nearly 40 years. Home prices remain elevated, and the market feels detached from broader economic trends, operating in a box of its own. These challenges are unlikely to fade soon.

In contrast, the broader economy heading into 2025 shows signs of strength. Job growth remains steady, with unemployment at approximately 4.2% and trending downward. Wage growth continues, bolstering household spending, while corporate profits are projected to support stock market gains. GDP growth is stable, maintaining the positive momentum seen in recent quarters. Small businesses are optimistic, reporting increased activity and expansion in recent months.

Inflation, while still present, has moderated, hovering between 2.7% and 2.9%, a manageable level compared to the highs of recent years. Consumer confidence remains robust, supported by steady wage growth and rising spending. The price-to-earnings ratio at the beginning of 2025 indicates investor optimism, with risk appetite showing signs of growth.

However, uncertainties remain. A new administration’s proposed tariffs and immigration policy changes could introduce volatility, complicating the otherwise positive economic narrative. These factors act like poorly prescribed glasses, distorting the broader outlook.

While 2025’s overall economic picture appears bright, the housing market remains difficult to predict. Constrained by high mortgage rates, low inventory, and lingering affordability concerns, it continues to operate outside the influence of general economic indicators. Speculation about its future trajectory remains fraught with uncertainty.

That said, opportunities exist for specific market segments. Cash buyers and those who don’t need to sell their current homes to purchase another are finding success. Conversely, for those uncertain about where to move after selling—particularly large families with pets, those risk-averse, or those hesitant to rent temporarily—2025 may pose additional challenges.

Kirk Gollwitzer is a local real estate broker serving Tryon and the surrounding areas.